On Thursday, investment firm Piper Sandler adjusted its price target for CONMED Corporation (NYSE:CNMD) shares, a medical technology company, reducing it to $80 from the previous $95 while retaining an Overweight rating on the stock.
The adjustment follows CONMED's second-quarter 2024 earnings report, which showed a slight miss in revenue but a marginal beat in the bottom line.
CONMED's General Surgery business exceeded expectations, and the company noted that its AirSeal product line continued to show robust growth, with capital sales in the second quarter of 2024 surpassing those in the same period of the previous year. This performance is seen as a positive sign of the product's enduring market presence.
However, the company has revised its full-year guidance downward by approximately 3.5% due to persistent supply chain challenges within its legacy Orthopedic business. These issues have been affecting the company for nearly a year and are anticipated to impact revenue in the second half of 2024.
The stock's price is expected to decline following the lowered guidance, a reaction that Piper Sandler acknowledges. Despite the near-term headwinds, the firm remains optimistic about CONMED's growth prospects. Piper Sandler cited several promising aspects of the company's portfolio, including the Biorez technology, as reasons for maintaining the Overweight rating.
In other recent news, CONMED Corporation has seen a series of adjustments in its price target by different financial advisory firms, following its second-quarter 2024 earnings report. Piper Sandler revised its price target for CONMED down to $80 from $95, despite maintaining an Overweight rating.
This was in response to a slight miss in revenue but a marginal beat in the bottom line, with the company's General Surgery business and AirSeal product line showing robust growth.
Similarly, Needham reduced its price target for CONMED to $97 from $106, while still maintaining a Buy rating, following a revenue shortfall and an earnings per share figure that exceeded the consensus.
The firm also noted a slowdown in the company's organic revenue growth due to ongoing supply chain challenges, particularly within its Orthopedic Surgery division. Despite these challenges, CONMED managed to increase its gross margin and operating margin year-over-year.
Another adjustment by Needham reduced CONMED's price target to $106 from $107, following the second-quarter results from Intuitive Surgical (NASDAQ:ISRG), which included higher-than-expected placements of its da Vinci 5 surgical systems. This development is anticipated to pose a near-term challenge to CONMED's revenue and earnings per share.
Despite these adjustments, both Piper Sandler and Needham maintain a positive outlook on the company's stock performance, citing various promising aspects of the company's portfolio and its continued growth opportunities.
InvestingPro Insights
In light of the recent price target adjustment by Piper Sandler for CONMED Corporation (NYSE:CNMD), InvestingPro data provides additional context that may be useful for investors. With a market capitalization of $2.13 billion and a trailing twelve-month P/E ratio of 27.25, CONMED appears to be trading at a valuation that reflects its earnings potential. Notably, the company's PEG ratio, which stands at a modest 0.14 for the last twelve months as of Q1 2024, suggests that its earnings growth is not fully reflected in its current price.
InvestingPro Tips indicate that CONMED's net income is expected to grow this year, which aligns with Piper Sandler's optimistic view on the company's growth prospects. Additionally, the company has a track record of maintaining dividend payments for 13 consecutive years, offering a dividend yield of 1.16% as of the latest data. This could be an attractive point for income-seeking investors, especially in a market where reliable dividends are appreciated.
For those interested in deeper analysis, InvestingPro offers more tips on CONMED, including insights on earnings revisions by analysts and the company's liquidity position. There are 6 additional tips available for CONMED on InvestingPro at https://www.investing.com/pro/CNMD, which can provide investors with a comprehensive understanding of the company's financial health and future outlook.
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